have two drives, /dev/hda that holds Etch (/dev/hda1) and /dev/sda that
holds Sarge (/dev/sda1). Both drives have swap space and grub and fstab
have the correct entries. Grub is installed on the MBR of /dev/hda and
the menu.lst resides in /boot/grub/.

I'm curious here. Etch is on an IDE drive and Sarge is on a USB drive?
Also, when you installed Sarge on the sda1 drive did it not boot
properly immediately after the installation? If so, when did it stop
booting properly?
Rob

A suggestion.
Check your BIOS settings to make sure USB boot is at the top of the boot
order.

Yes, that is correct, Etch is on /dev/hda1 and Sarge is on /dev/sda1
which is controlled by USB. I won't go into the details of why I did
that :-D.

Sarge did not boot properly immediatly after the install and in fact
never booted on sda1.

The BIOS settings have the USB boot at the top of the boot sequence.

I also tried replacing the line root=/dev/sda1 in menu.lst by
root=/dev/hdb1 without success.